'Boy' George 'Slasher' Osborne says we are all in this together and produced a budget on Tuesday that he described as fair to all.It included public sector pay and child benefit freeze, tax credit cuts and a two and a half percent rise on VAT from 17.5% to 20%... and 25% across the board departmental budget reductions. All things that will heavily impact the lowest earners the hardest.
Read more here.
So how has he dealt with the upper echelons. Well, he has increased Capital Gains Tax for high earners from 18% to 28%... and has decided to tax the banking sector £2 billion pounds.
On the face of it, it seems that all bases are covered, but look more closely at the reality of the situation. One of the biggest burdens on the public finances is the huge interest payments on the money we have borrowed to rescue the banks and financial institutions. This is around a trillion pounds.... As a soverign state with a AAA credit rating we borrow at a rate of 3.6%... but this means that we have to find £36 billion a year just to maintain the loan, let alone pay it down.
Interestingly we have loaned nearly all of this money to the banks at around 0.5% interest rate. So we will get back from them about £5 billion a year in interest? Meanwhile these same banks loan the money we have borrowed, and pay interest on, to other borrowers at interest rates of at least 5.5% and sometimes at much higher rates (see Kraft takeover of Cadbury for instance) ... earning the banks at least £55 billion a year in interest and in actuality a whole lot more.
So now the 'Boy' George 'Slasher' Osborne is to impose a £2 billion tax upon the banking sector. This means that out of the £1 trillion pounds we have loaned, the banks will pay back around £7 billion, leaving us with £29 billion of interest payments still outstanding.
Indeed, as you can tell, we are NOT all in this together!
